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VAT and selling via Amazon in the USA

VAT and selling via Amazon in the USA

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Have been approached by a company director, company sources products in China and sells them via Amazon in the US to prepare accounts. 

The goods are shipped direct to the US and never enter the UK.

Amazon are charging VAT on some of their services, I believe correctly as electronic services provided to an EU company, VAT number prefixed EU-.

Director has asked whether company can register for VAT to reclaim the VAT Amazon are charging, plus VAT incurred on other UK expenses (like Accountancy fees).

Not entirely sure what the position is here:

There is no export from the UK, there are no sales in the UK - and no current intention to make any, current turnover is well below VAT threshold, as supplies are zero rated rather than exempt am assuming partial exemption does not apply. Am leaning towards saying they may be able to register voluntarily per HMRC VAT notice 700/1, 2.9 and reclaim the VAT.

Am going to call my advice line but am not in the office tomorrow - any thoughts in the meantime?

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29th Mar 2016 13:51

Is it a UK company ?

My understanding is that EU- prefixed VAT numbers are issued to non-EU companies who incur VAT obligations within the EU (e.g. certain China-based Amazon sellers fulfilling orders via a UK warehouse).

Although it is likely nothing untoward is going on, it would be worth establishing the exact company structure, where it is registered, where the directors are domiciled etc (i.e. all the standard KYC stuff, but maybe with a few additional probing questions).

Another question to ask is, wouldn't it be simpler just to register the business in the US, which means they could sign up to Amazon.com. Signing up to Amzon.co.uk, and then jumping through all e extra hoops to sell in the US and potentially reclaim VAT seems to me to be a little unnecessarily (and maybe artificially) complicated, unless there's a very good reason for it.

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